FTC: Company Misused Windows for Pop-Up Deluge

The Federal Trade Commission has set its sights on a company it says used a flaw in the Microsoft Windows operating system to bombard computer users with pop-up ads. The deluge of ads told consumers they would stop only if they bought software from the company to block them, the FTC alleges.

Since May, according to the FTC complaint, San Diego-based D Squared Solutions exploited a flaw in Windows Messenger Service, a communication system for Windows meant to let network administrators communicate instant information. (Windows Messenger Service differs from MSN Messenger.) D Squared's software used the system to transmit a barrage of pop-up ads touting software that would stop such ads. The FTC called the scheme "extortion."

"There are always going to be ways in any kind of software that it can be configured to give problems to consumers," Howard Beales, director of consumer protection at the FTC, said at a news conference Nov. 6. "It's an unfair practice for people to take advantage of it."

On Oct. 30, a federal court in Baltimore issued a temporary restraining order against D Squared and its executives, Anish Dhingra and Jeffrey Davis, forbidding them from using Windows Messenger Service to send ads. The FTC complaint, which was sealed until Nov. 6, requests unspecified financial penalties for harm created by the messages.

Beales said D Squared sold its software from Web sites, boasting it could send pop-up ads to 135,000 Internet addresses hourly and included a database of 2 billion unique addresses. The FTC complaint cited one other company that uses the software, Scintillant Inc. But Beales said the FTC does not think the practice is widespread.

D Squared is charged with two counts. One is an extortion charge in the sending of messages that offer a product to stop the messages. The other count involves improperly using Windows Messenger Service to interfere with consumers' use of their computers by placing the pop-up ads near the center of their screens and sending them as frequently as every 10 minutes.

According to the complaint, one such ad read, "Did you know that there is a one-click easy way to stop these pop-ups FOREVER? For Free information, please visit www.defeatmessenger.com." The FTC said D Squared operated at least 30 such Web sites offering software for $25 to $30.

Beales stressed that the case was not against Web pop-up ads, which account for about 7 percent of all online ads. He said any company using an unfair practice to send unsolicited messages that interfered with consumers' use of their computer would risk FTC action.

"We would have to examine each case on its merits as far as the frequency and the particular kinds of advertising," he said.

Any company using Windows Messenger Service to distribute pop-up ads is "certainly not much safer" from FTC action, he said.

Microsoft alerted customers to the vulnerability in Windows Messenger Service last month, urging home computer users to turn off the function. Future Windows editions will have the service turned off as its default setting. Beales also urged computer users to install firewalls to protect against such intrusions.

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